* in terms of number of screens. Q2 & H1 FY17 Results Presentation November 08, 2016

Transcription

1 * in terms of number of screens. Q2 & H1 FY17 Results Presentation November 08, 2016

2 Safe Harbour The presentation has been prepared by UFO Moviez India Limited together with its subsidiaries (the Company ), for informational purpose only and does not constitute or form part of an offer, solicitation or invitation of any offer to purchase or subscribe for any securities of the Company in any jurisdiction, nor should this presentation or any part thereof form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever. This presentation has not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in the presentation. None of the Company or any of its affiliates, advisers or representatives accepts any liability whatsoever for any loss howsoever arising from any information presented or contained in these materials. The information presented or contained in this presentation is subject to change without notice and its accuracy is not guaranteed. This presentation, except for the historical information, may contain forward looking statements, including the words or phrases such as expects, anticipates, intends, will, would, undertakes, aims, estimates, contemplates, seeks to, objective, goal, projects, should and similar expressions or variations of these expressions or negatives of these terms indicating future performance or results, financial or otherwise, which are forward looking statements. These forward looking statements are based on certain expectations, assumptions, anticipated developments and other factors which are not limited to, risk and uncertainties regarding fluctuations in earnings, market growth, intense competition and the pricing environment in the market, ability to maintain and manage key customer relationship and supply chain sources and those factors which may affect our ability to implement business strategies successfully, namely changes in regulatory environments, political instability and new or changed priorities of the trade. The Company, therefore, cannot guarantee that the forward looking statements made herein shall be realized. The Company, based on changes as stated above, may alter, amend, modify or make necessary corrective changes in any manner to any such forward looking statement contained herein or make written or oral forward looking statements as may be required from time to time on the basis of subsequent developments and events. The Company does not undertake any obligation to update forward looking statements that may be made from time to time by or on behalf of the Company to reflect the events or circumstances after the date hereof. 1

3 UFO Moviez at a Glance India s Largest Digital Cinema Network and In-Cinema Advertising Platform Indian Film Industry s Largest Content Distribution Highway India s Largest In-cinema High Impact Advertising Platform 5,055* Digital Screens in India 3,748 In Cinema Advertising Screens ~2.13 million Seating capacity per show with an average weekly seating capacity of ~49 million Digitally Delivered 467 Movies for 820 Distributors in Q2FY17 1,067 Advertisers in Q2FY17 Across 1,943 Locations Across 1,906 Locations Data as on September 30, 2016 * Nepal forms a part of the Indian Film Territory, hence the # of digital screens includes 113 screens in Nepal 2

4 UFO s Innovative Solution for Analog Cinema Market Analog Cinema Era beset with Issues UFO s Innovative Solution Satellite Delivery of Cinema Solution provider, not Product provider In-cinema Advertising proposition Satellite Solution Viewers Pan India movie release through satellite transfer End to end technology solution to accelerate uptake Connect cinema audience with advertisers Government of India Honda Motorcycle Johnson & Johnson Google Staggered release Poor distribution Piracy leakage Exhibitor Exhibitor Coca Cola Vodafone ICICI Pru Life HDFC Bank Advertisers Lower box office collections Damaged reels Low cost Immediate Flexible End to end Reliable Greater monetization Pan-India reach Single reliable platform Transparent 3

5 Philosophy Value Creation Across the Value Chain Digitization has redefined film economics by enabling pan-india releases on day one and improving viewing experience. Aggregated ad inventory across a fragmented exhibitor base has created a unique ad platform with high effectiveness and reach. UFO Proposition Stakeholder Impact Exhibitors Enable digitization of screens Provides installation, investment and maintenance services for digital cinema systems Receive fresh / first-day first-show content Access to almost all films released historically Effectively monetize ad inventory Content variety clubbed with high quality viewing experience Higher theatrical revenues given day and date release Operational flexibility & simplicity Ad revenue upside Content Owner / Distributor Pan-India release Fully secure, encrypted signal Pay per show model Low cost distribution even for under-served smaller markets Increased box office revenues Reduced piracy Reduced distribution costs Advertisers Aggregate ad inventory in 3,748 screens (including 329 D- Cinema screens); seating capacity of ~1.76 Mn viewers per show across India as on September 30, 2016 Centralized scheduling Flexible and customizable ad platform Growing usage by advertisers Targeted advertising High impact medium Transparency Multi-language flexibility 4

6 Our Vision Phase VII Recreating Growth Lever Creating additional UFO customer base in India by providing end-to-end Consulting Services to Local Entrepreneur to develop greenfield exhibition centers Leveraging Phase Phase VI Phase V Leveraging on Existing Infrastructure to build newer Synergetic Businesses like Caravan, Club Cinema and UFO Framez Maturing and Growing the In Cinema Advertisement revenue stream Phase IV Conceiving In Cinema Advertising Platform Phase III Achieving 100% elimination of Physical Prints Phase II Pivotal role in converting existing Analog Screens into Digital Phase I Introduction of Digital Cinema

7 Shareholder Value Creation Capital Intensity Initial high capital intensity over; poised to generate higher revenues with lower incremental capex. Capital Efficiency Network Effect and Operational Efficiencies lead to increasing RoCE. Capital Allocation Intent to grow only in synergistic businesses with low content risk. Capital Distribution Intent to distribute 25% of PAT annually. 6

8 Financial and Operating Highlights 7

9 Financial Highlights Q2FY17 vs Q2FY16 Consolidated, excluding VDSPL** Total Revenue (INR Mn) 1,493 1,596 EBITDA (INR Mn) & Margin (%) 35.9% 31.6% PBT (INR Mn) & Margin (%) 23.0% 17.1% PAT* (INR Mn) & Margin (%) 15.1% 12.2% % 21.5% 43.7% 33.3% Q2FY16 Q2FY17 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Consolidated Total Revenue (INR Mn) 1,497 1,599 EBITDA (INR Mn) & Margin (%) 34.8% 30.9% PBT (INR Mn) & Margin (%) 20.5% 15.9% PAT* (INR Mn) & Margin (%) 12.7% 11.0% % 20.3% 37.4% 23.1% Q2FY16 Q2FY17 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Q2FY16 Q2FY17 *PAT after Minority Interest. Tax expense includes Rs million which is tax paid by Company s subsidiaries on the Inter-Company divided income they received from UFO s other subsidiary. As such the normal consolidated PAT attributed to the Groups business operations should have been Rs. 227 million. **VDSPL includes Caravan Talkies and Club Cinema businesses 8

10 Financial Highlights H1FY17 vs H1FY16 Consolidated, excluding VDSPL** Total Revenue (INR Mn) 2,783 2,928 EBITDA (INR Mn) & Margin (%) 33.1% 31.7% PBT (INR Mn) & Margin (%) 19.5% 16.1% PAT* (INR Mn) & Margin (%) 13.4% 11.6% % 9.8% 27.5% 21.2% H1FY16 H1FY17 H1FY16 H1FY17 H1FY16 H1FY17 H1FY16 H1FY17 Consolidated Total Revenue (INR Mn) 2,802 2,945 EBITDA (INR Mn) & Margin (%) 31.0% 31.3% PBT (INR Mn) & Margin (%) 15.0% 16.3% PAT* (INR Mn) & Margin (%) 10.6% 10.2% % 6.0% 13.9% 1.3% H1FY16 H1FY17 H1FY16 H1FY17 H1FY16 H1FY17 H1FY16 H1FY17 *PAT after Minority Interest **VDSPL includes Caravan Talkies and Club Cinema businesses 9

11 Driving Wide Spread Release of Movies on UFO Network Top 10 Hindi Top 10 Telugu Release Date Movie # of Screens 8-Jul SULTAN 3,311 2-Sep JANATHA GARAGE Aug RUSTOM 2, Aug BAABU BANGAARAM Aug MOHENJO DARO 2, Jul JAKKANNA (BACK TO ENTERTAIN) Jul DISHOOM 2, Sep MAJNU Aug A FLYING JATT 2,265 5-Aug SRIRASTU SUBHAMASTU Sep AKIRA 2, Jul SELFIE RAAJA Sep RAAZ REBOOT 1, Aug THIKKA Jul GREAT GRAND MASTI 1, Aug CHUTTALABBAI Sep BAAR BAAR DEKHO 1, Aug ATADUKUNDAM RAA (JUST CHILL) Aug HAPPY BHAG JAYEGI 1, Jul PELLI CHUPULU 225 Release Date Movie # of Screens Top 10 Tamil Top 10 Marathi Release Date Movie # of Screens 22-Jul KABALI Aug KANHA Sep IRUMUGAN Jul HALF TICKET Sep KIDAARI Aug YZ Aug THIRUNAAL Aug TALEEM Aug DHARMADURAI Sep ONE WAY TICKET Sep THODARI Jul & JARA HATKE Jul DHILLUKU DHUDDU Jul MADE IN MAHARASHTRA Jul JACKSON DURAI Sep YAARI DOSTI Aug WAGAH Aug Release Date Movie # of Screens 1-Jul APPA 85 2-Sep FAQT TUJHYACH SATHI 94 # of screens reflects the # of screens the movie released on UFO network across the lifetime of the Movie Continued 10

12 Driving Wide Spread Release of Movies on UFO Network Top 10 Kannada Top 10 Malayalam Release Date Movie # of Screens 12-Aug KOTIGOBBA Jul KASABA Jul ZOOM Jul ANURAGA KARIKKIN VELLAM Sep MUNGARU MALE Aug PRETHAM Sep NEER DOSE Aug VISMAYAM Jul KALPANA Aug ANNMARIYA KALIPPILANNU Jul NAANI Jul SHAJAHANUM PAREEKUTTIYUM Jul SANTHEYALLI NINTHA KABIRA Aug IDI Jul BHUJANGA Aug MARUBHOOMIYILE AANA Jul DEEL RAJA 93 9-Sep OOZHAM - ITS JUST A MATTER OF TIME Aug HAPPY BIRTHDAY 84 9-Sep OPPAM 94 Release Date Movie # of Screens Top 10 Gujarati Top 10 Bhojpuri Release Date Movie # of Screens 9-Sep TUU TO GAYO Aug DULHAN CHAHI PAKISTAN SE Sep WRONG SIDE RAJU Jul GADAR Jul ROMEO & RADHIKA 70 5-Aug RAM LAKHAN Aug DUNIYA JALE TO JALE Jul SAJAN CHALE SASURAL Aug CHHOKRI VINANU GAM 49 9-Sep DEEWANE Sep MAANEWALO DIKRO DIKRANEWALI MAA 48 9-Sep JIDDI 95 2-Sep HALF TICKET 47 2-Sep DIL HAI KI MANTA NAHI Aug ALYA HAVE SHU Aug BAHINIYA Aug NAVRI BAZAR Aug GHARWALI BAHARWALI 32 Release Date # of screens reflects the # of screens the movie released on UFO network across the lifetime of the Movie Movie # of Screens 16-Sep EKKO BADSHAH RANI 39 2-Sep HUM HAI JODI NO

13 Consolidated Revenue Mix (INR Mn) Q2FY17 Q2FY16 H1FY17 H1FY % 1, % % 1, % % % % 2,932 2, % % % 1,327 45% 1,254 45% Exhibitor Revenue Distributor Revenue Advertisement Revenue (INR Mn) Q2FY17 Q2FY16 Growth H1FY17 H1FY16 Growth Advertisement Revenue % % Virtual Print Fees - E-Cinema % % Virtual Print Fees - D-Cinema % % Lease rental income - E-Cinema % % Lease rental income - D-Cinema % % Other Operating Revenues % % Total Sale of Services 1,410 1, % 2,596 2, % Total Sales of Products % % Revenue from Operations 1,592 1, % 2,932 2, % 12

14 In Cinema Advertising Performance 13

15 In Cinema Advertisement Operating Parameter in Mn Seats # of UFO Screens 3,690 3,748 Full House Seating Capacity Annualised* 2,573 2,537 Q2FY16 Q2FY17 Q2FY16 Q2FY17 Q2FY17 Top 50 Cities Rest of India Multiplex Single Multiplex Single # of UFO Screens ,315 Full House Seating Capacity Per Show All Screens 105, , ,770 1,206,505 Seating Capacity Per Screen Per Show *Full House Seating Capacity Annualised (in Mn Seats) ,737 *Full house seating capacity Annualised is calculated by multiplying full house seating capacity per show x 4 shows a day x 30 days x 12 months 14

16 Advertisement Revenue Analysis INR Mn Government + PSU Corporate + Hyperlocal + Caravan % 45% % 42% 58% 43% 43% 57% Q2FY16 Q2FY17 H1FY16 H1FY17 In Cinema Advertisement Q2FY17 Q2FY16 H1FY17 H1FY16 Ad Revenue / Screen for the period (Avg) (Rs.) 139,389 92, , ,198 Average # of minutes sold / show / Ad Screen # of In Cinema Advertising Clients 1,067 1,058 1,919 1,544 Average # of minutes sold / show / Ad Screen is calculated by dividing total # of advertisement minutes sold by average # of Screens with Ad Rights during the period Average # of Advertising Screens = (Sum of # of Opening Advertisement Screens and # of Closing Advertisement Screens) / 2 15

17 Theatrical Revenues 16

18 Theatrical revenues from Distributors E Cinema - VPF Domestic Revenue (INR Mn) Gross Revenue Net Revenue Q2FY16 Q2FY17 H1FY16 H1FY17 D Cinema - VPF Domestic Revenue (INR Mn) International Revenue (INR Mn) Q2FY16 Q2FY17 H1FY16 H1FY17 Q2FY16 Q2FY17 H1FY16 H1FY17 Domestic includes revenues generated from screens in Nepal Net Revenue = Gross Revenue less Revenue Share with the Exhibitors 17

19 Operating Parameter VPF Revenue India # of Screens Q2FY17 Q2FY16 H1FY17 H1FY16 E Cinema 3,549 3,481 3,549 3,481 D Cinema 1,506 1,459 1,506 1,459 Total 5,055 4,940 5,055 4,940 # of Screens as on September 30, 2016 VPF Revenue / Screen (Average**) (in Rs.) Q2FY17 Q2FY16 H1FY17 H1FY16 E Cinema Gross 83,012 73, , ,435 E Cinema Net 78,813 70, , ,086 D Cinema Gross 144, , , ,829 D Cinema Net 98,959 98, , ,492 **Average # of Screens = (Sum of # of Opening Screens and # of Closing Screens) / 2 18

20 Operating Parameter VPF Revenue International Number of Screens Q2FY17 Q2FY16 H1FY17 H1FY16 Total # of Screens as on September 30, 2016 VPF Revenue / Screen (Average**) (in Rs.) Q2FY17 Q2FY16 H1FY17 H1FY16 D Cinema Gross 201, , , ,651 D Cinema Net 65,599 69, , ,515 Total number of Screens includes Middle East and Israel only **Average # of Screens = (Sum of # of Opening Screens and # of Closing Screens) / 2 19

21 Progress of Caravan Talkies Q2FY17 Update Caravan Talkies was non-operational in Q2FY17 due to monsoons IMRB Research IMRB conducted a research on Caravan Talkies to assess the efficacy of the medium and effectiveness of the activity across villages, below are the findings: Great business opportunity for Caravan Talkies as it operates in villages that lack regular sources of entertainment Mobile Internet and TV penetration is very low There are no avenues of big screen entertainment Awareness of Caravan Talkies 85% Likeability of Caravan Talkies 4.4 out of 5 Average headcount per show per van 226 High brand/activation recall Strategic Initiatives Additional revenue monetisation through Static Overlay Advertising during the movie and Live Activations Improved transparency with GPS tracking across all vans V-Sat installation across multiple villages in one cluster for on-time advertising and content delivery on the fly On board technical support to minimize technical failures Outlook Efforts to improve revenues have further intensified, Caravan Talkies is expected to cash breakeven in H2FY17 20

22 Financial Performance 21

23 Consolidated Results (INR Mn) Q2FY17 Q2FY16 Growth H1FY17 H1FY16 Growth Revenue from Operations 1,592 1, % 2,932 2, % Other Income % % Total Revenue 1,599 1, % 2,945 2, % Total Expenses 1,043 1, % 2,025 1, % EBITDA % % Depreciation and Amortisation % % EBIT % % Finance Cost % % Finance Income % % PBT % % Tax* % % PAT % % Profit from Associates % % Minority Interest % % PAT, Profit from Associates & Minority Interest % % Basic EPS % % *Tax expense includes Rs Mn which is tax paid by Company s subsidiaries on the Inter-Company divided income they received from UFO s other subsidiary. As such the normal ETR attributed to the Groups business operations should have been 34.51% compared to the reported 41.96%. 22

24 Consolidated Expenditure Analysis Expenses as a % of Total Revenue Q2FY17 Q2FY16 H1FY17 H1FY16 1) Total Operating Direct Cost 39.6% 46.4% 41.4% 44.9% Key Operating Direct Cost Components i) Advertisement revenue share payment 8.9% 7.5% 8.9% 8.1% ii) VPF D-Cinema share payment to D-Cinema Exhibitors 12.8% 13.4% 13.2% 12.9% iii) Purchase of Equipment, Lamps and Spares 9.2% 17.1% 9.2% 14.6% 2) Employee Benefit Expenses 12.5% 10.9% 12.8% 11.6% 3) Other Expenses (SG&A ) 13.1% 11.8% 14.6% 12.5% Total Expenses 65.2% 69.1% 68.7% 69.0% EBITDA Margin 34.8% 30.9% 31.3% 31.0% EBITDA Margin excluding VDSPL* 35.9% 31.6% 33.1% 31.7% *VDSPL includes Caravan Talkies and Club Cinema businesses 23

25 Consolidated Balance Sheet Equity and Liability Assets 30-Sep Mar-16 (INR Mn) (INR Mn) 30-Sep Mar-16 Shareholder s Funds Non-Current Assets Equity Share Capital Fixed Assets 2,854 2,991 Reserves and Surplus 5,211 4,890 Goodwill on Consolidation 1,851 1,721 Total of Shareholder s Funds 5,487 5,165 Non-Current Investments Minority Interest Deferred Tax Assets (Net) Long-Term Loans and Advances Non-Current Liabilities Other Non-Current Assets Long-Term Borrowings Total Non-Current Assets 5,558 5,549 Other Long-Term Liabilities Long-Term Provisions 10 8 Current Assets Total Non-Current Liabilities Current Investments Current Liabilities Inventories Short-Term Borrowings Trade Receivable 1,311 1,515 Trade Payables Cash and Cash Equivalents Other Current Liabilities 1,120 1,128 Short-Term Loans and Advances Short-Term Provisions Other Current Assets Total Current Liabilities 2,180 2,283 Total Current Assets 3,074 2,935 Total Equity and Liability 8,632 8,484 Total Assets 8,632 8,484 24

26 Financial Performance excluding VDSPL Reconciliation to EBITDA excluding VDSPL** (INR Mn) Q2FY17 Q2FY16 Growth H1FY17 H1FY16 Growth Reported EBITDA including VDSPL % % Margin 34.8% 30.9% 31.3% 31.0% VDSPL EBITDA Loss EBITDA Excluding VDSPL % % Margin 35.9% 31.6% 33.1% 31.7% *PAT after Minority Interest **VDSPL includes Caravan Talkies and Club Cinema businesses Reconciliation to PAT excluding VDSPL** (INR Mn) Q2FY17 Q2FY16 Growth H1FY17 H1FY16 Growth Reported PAT* Including VDSPL % % Margin 12.7% 11.0% 10.2% 10.6% VDSPL PAT Loss PAT Excluding VDSPL % % Margin 15.1% 12.2% 13.4% 11.6% 25

27 Annexure 26

28 Financial Highlights 5 Years 2,077 Total Revenue (INR Mn) 4,793 4,250 3,375 5,721 EBITDA (INR Mn) & Margin (%) 31.7% 31.3% 33.6% 32.3% 25.2% 1,848 1,608 1,332 1, FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 PBT (INR Mn) & Margin (%) 12.2% 12.1% 14.4% 17.1% % FY12 FY13 FY14 FY15 FY16 PAT* (INR Mn) & Margin (%) 9.8% 2.2% 11.2% 11.1% 10.2% FY12 FY13 FY14 FY15 FY16 *PAT after Minority Interest 27

29 Advertisement Revenue 5 Years INR Mn Government + PSU Corporate + Caravan 1,578 FY12 FY16 Revenue CAGR 44% % 82% 1, % 46% 19% 81% 59% 54% 48% 52% FY12 FY13 FY14 FY15 FY16 # of Screens with Ad Rights 2,647 3,071 3,592 3,784 3,713 Annual Ad Revenue / Screen (Avg) (INR) 159, , , , ,275 # of minutes sold / show / Ad Screen # of minutes sold / show / Ad Screen is calculated by dividing total # of advertisement minutes sold by average # of advertisement screens during the period Average # of Advertising Screens = ( Sum of # of Opening Advertisement Screens and # of Closing Advertisement Screens) / 2 28

30 Key Financial Parameters 5 Years RoCE (%) RoE (%) 12.01% 12.66% 14.34% 17.63% 10.10% 12.83% 11.49% 13.09% 4.51% 2.06% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Net Debt* (INR Mn) 1,108 Net Debt / EBITDA (X) FY12 FY13 FY14 FY15 FY FY12 FY13 FY14 FY15 FY16 *Net Debt = Total Debt less Cash and Cash Equivalents RoCE = EBIT/Average (Networth + Long Term Debt + Short Term Debt + Current Maturing Long Term Debt + Minority Interest) RoE = PAT after Minority Interest / Average Networth 29

31 Shareholding (% of Total # of shares) September 30, 2016 Promoters 28.86% Foreign Venture Capital Investors 19.03% FII 3.22% DII 21.56% Corporate Bodies 10.53% Foreign Bodies 1.14% Marquee Institutional Investors* SBI Mutual Fund Reliance Capital Asset Management DSP Blackrock Max Life Insurance Grandeur Peak Global Advisors Nomura Singapore Reliance Nippon Life Insurance Others 15.67% Union Asset Management Total # of Shares 27,600,801 Aviva Life Insurance *As on September 30,

32 About Us UFO Moviez India Limited UFO Moviez India Limited (BSE Code: ; NSE Code: UFO) is India s largest digital cinema distribution network and in-cinema advertising platform in terms of number of screens. UFO operates India s largest satellite-based, digital cinema distribution network using its UFO-M4 platform, as well as India s largest D-Cinema network. As on September 30, 2016, UFO s global network, along with subsidiaries and associates, spans 6,730 screens worldwide, including 5,055 screens across India and 1,675 screens across the Middle East, Israel, Mexico and the USA. UFO s digitization and delivery model has been a key driver of extensive digitization of Indian cinemas and has enabled wide-spread, same day release of movies across India. UFO adds value to all stakeholders in the movie value chain, spanning movie producers, distributors, exhibitors and the cinema-going audience. UFO provides value to movie producers and distributors by reducing distribution costs, providing reach to a wide network, providing a faster method of delivery of content and reducing piracy through encryption and other security measures. We provide value to movie exhibitors throughout India by providing access to first day release of movies on our digital platform. Audiences benefit from faster access to new movie releases and a consistently high quality viewing experience. UFO has created a pan India, high impact in-cinema advertising platform with generally long-term advertising rights to 3,748 screens, with an aggregate seating capacity of approximately 1.76 million viewers and a reach of 1,906 locations across India, as on September 30, UFO s in-cinema advertising platform enables advertisers to reach a targeted, captive audience with high flexibility and control over the advertising process. UFO s in-cinema advertising platform also allows small exhibitors who otherwise are not able to effectively monetise their advertising inventory due to their limited scale and reach to receive a greater share of advertisement revenue than they are able to using traditional advertising methods. Visit us at For further details, contact: Ashwin Chhugani Manager Investor Relations Tel: : ashwin.chhugani@ufomoviez.com Sanghamitra Karak Assistant Manager Investor Relations Tel: sanghamitra.karak@ufomoviez.com 31